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Nespresso to expand production as coronavirus boosts coffee at-home globally

Premium coffee pod maker announces $170.5m expansion of Swiss production facility as coronavirus continues to boost at-home coffee consumption globally

A coffee pod production line at Nespresso's Romont production facility in Switzerland | Credit: Nespresso



Nespresso will add 10 new production lines to its Romont coffee pod production facility in Switzerland amid ‘growing consumer demand worldwide’, the firm has said. The first new production lines at the vast 11-hectare facility are expected to be operational by 2022, with the expansion anticipated to create 300 jobs over the next 10 years.
 
“Despite the challenging times we have all been living in, this strategic long-term investment reconfirms Nespresso’s continuous business success and leadership in the portioned coffee segment, which we pioneered back in 1986”, said Nespresso CEO, Guillaume Le Cunff.
 
The Covid-19 pandemic has led to a surge in at-home coffee consumption, with consumers worldwide facing restricted movements and many coffee shops shifting to online sales, takeaway and delivery.
 
In April 2020, Nespresso’s parent company, Nestlé reported its strongest global quarterly sales in five years, with its Starbucks, Nescafé and Coffee Mate packaged coffee ranges contributing to 7.4% organic sales growth across its Americas (AMS) business.
 
The same month, JAB Holdings-controlled Keurig Dr Pepper reported a 6% increase in the retail consumption of its single-serve coffee pods during the first quarter of 2020. The strength of the global coffee at-home segment was further underlined in June 2020, when fellow JAB Holdings coffee at-home and café business, JDE Peet’s, raised $2.5bn with an IPO that valued the company at $17.3bn.
 
Whether the surge in consumer demand for at-home coffee will endure in the long-term is uncertain, but with on-going disruption to out-of-home coffee sales due to the pandemic, major coffee chains are also seeking to boost sales through retail packaged coffee.
 
In June 2020 Europe’s biggest coffee chain Costa Coffee announced the expansion of its packaged coffee offer across the Continent. UK-based coffee and food-to-go chain, Pret a Manger, which has been hard hit by reduced commuter footfall during the pandemic, has also sought to extend its reach in the at-home coffee market, launching a packaged coffee offer on e-commerce giant Amazon.

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